Stocks are down as investors react to a rise in jobless claims, a battle over Ben Bernanke's confirmation, and an earnings warning from FedEx (FDX). In Europe concerns are still running high over Greece's credit rating. Money is flowing into save havens like U.S. bonds and the dollar. The dollar's strength, thanks to a weak euro, is pushing commodities lower. Crude oil is off 1.1% near $71.81 a barrel. Gold futures are down almost $28 to $1,108 an ounce. Natural gas is the exception with gas up 7% on news that inventories saw their biggest one-week decline ever for this time of year due to the recent cold spell.
Foreign markets were down across the board. Yesterday banks were leading stocks higher. Today the financials are leading the market lower. The Japanese NIKKEI lost 0.13%. The Chinese Shanghai fell 2.3% and the Hong Kong Hang Seng lost 1.2%. In Europe the tone was somber with concerns over Greece's credit worthiness and bearish comments out of England on retail sales. The Office for National Statistics said sales in the U.K. fell at their fastest pace in six months in November. The English FTSE lost 1.9%. The French CAC-40 fell 1.1%. The German DAX gave up 1.0%.
Federal Reserve chairman Ben Bernanke made headlines today. A Senate panel approved his nomination to remain the fed chairman for another four years and forwarded the vote to the full Senate. Unfortunately for Ben it looks like there could be a fight. The panel voted 16-to-7 to approve his nomination and it could be a much closer vote in the Senate. Ben's term as fed chairman expires on January 31st, 2010. Wall Street hates uncertainty and this fight over his confirmation helped spook the market this morning.
Adding to recent doubts about the economic rebound was the Thursday morning weekly jobless numbers. The Labor Department said initial jobless claims rose 7,000 to 480,000 last week. Economists were expecting 465,000. The four-week moving average continues to decline, which is a good sign. Another good sign is the Conference Board's leading economic indicators (LEI) came in positive for the eight month in a row. November's LEI rose 0.9%, which was better than the +0.7% expected and much better than October's +0.3%. Another bullish sign for the economy was a positive report from the Philly Fed survey. Economists were expecting the Philadelphia Federal Reserve manufacturing report to fall from 16.7 in November to 16.0. December's number actually rose to 20.4. Numbers over 0.0 indicate a growing economy. This report helps offset the sharp decline in the New York report released earlier this week.
Investors were disappointed with some corporate news this morning. Package delivery giant FedEx (FDX) report earnings this morning. Profits came in at $1.10 per share, which was four cents better than expected. Unfortunately FDX issued a warning for the third quarter and guided earnings down into the 50-70 cent range versus Wall Street's estimates at 84 cents. The company is optimistic for 2010 but they're worried that volumes will fall after the holiday season ends. Shares of FDX are off 5.7% at $84.8.
Currently the S&P 500 index is off just over 10 points at 1098. The NASDAQ is bouncing from a test near the 2180 level but the index is still down 23 points on the session. The Dow Industrials are off more than 100 points at 10,336. The small cap Russell 2000 index is down 1.1% near 604.
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
Chart of the U.S. dollar ETF (UUP):
Scanning the OptionInvestor.com play list we're seeing minor declines for most of our candidates. I did notice that FFIV has hit our new stop loss at $49.75 closing the play. The rally in the dollar is helping push FCX to a 3.5% decline.